McAuliffe, lawmakers in tiff over office building

RICHMOND – When Gov. Terry McAuliffe lashed out at legislative Republicans last month over their refusal to expand Medicaid, he didn't just use his veto powers.

McAuliffe also told his staff to stop cooperating with a legislative committee studying Medicaid reforms. And he stopped work on a $300 million project that would have built a brand new building for General Assembly members and the couple hundred full-time staffers who work for the legislative branch.

Pulling executive branch cooperation from the legislature's Medicaid Innovation and Reform Commission may not mean much, since both the General Assembly and the governor have pushed to strip its viability as a path toward Medicaid expansion. But blocking construction of a new General Assembly Building has ruffled some feathers. Some legislative leaders question whether McAuliffe has the power to hold things up as he has.

Legislators have been back and forth for years about what to do with the current General Assembly Building, which is actually several buildings of various ages, all connected together. It has plumbing issues, air quality issues and asbestos in the walls and ceilings.

It needs a new fire suppression system, and that means ripping out the asbestos, House Appropriations Chairman S. Chris Jones said. Repair costs would mount quickly.

"It's a life-safety issue that's driving this," said Jones, R-Suffolk. "It's not us wanting to have a new building."

The plan had been to borrow up to $300 million in bonds to tear the building down, construct a new one, renovate another building nearby and build a new parking deck for Capitol Square. The state would repay the money over 20 years and, with interest included, the cost would hit about $430 million.

This plan was in the state's so-called "caboose" budget, which the legislature approved earlier this year and McAuliffe signed, albeit after he expressed some concern over the project's cost.

The caboose basically tweaks an existing budget, in this case the budget for fiscal 2014. It's completely separate from the fiscal 2015-16 budget, which is in effect as of July 1, and which McAuliffe signed in June after fighting unsuccessfully for months to have House Republicans include Medicaid expansion.

Legislative leaders agree that McAuliffe could eventually hold this project up, because he has to sign off the bonds before they can be issued. But that approval won't be needed for some time, and McAuliffe went a step further, telling the state's Department of General Services to stop planning for the project all together.

His authority there is less clear.

"The projects cannot be lawfully suspended or delayed simply because of one's subjective judgment that now is not the right time to proceed with the projects," legislative attorney Mark J. Vucci wrote in a recent email to Jones on this subject. "It was for the General Assembly to determine if and when to proceed with construction of the projects, and it did so by authorizing construction."

It's unclear, though, whether General Assembly leaders will press this argument. A new building was not a high priority for House Republicans, who wield the most legislative power in Richmond.

State Sen. John Watkins, who supports the project and represents a portion of downtown Richmond, said he believes the governor will come around on it. If something major broke in the building, rendering it uninhabitable, "that would be an awkward position for (the governor) to find himself in," said Watkins, R-Midlothian.

"I just think he's trying to make a point," Watkins said.

The point, McAuliffe has said, is that the state shouldn't spend so much money on a building when it can't afford other priorities, including a $10 million increase he wanted for homeless programs. The governor hasn't tied the issue directly to the Medicaid fight, but many others have.

At its core, this disagreement pits legislative prerogative versus executive power, and the General Assembly Building is just one of several fronts in the battle. Speaker of the House William Howell declared a pair of gubernatorial budget vetoes unconstitutional last month, essentially ignoring them and moving the state budget along as if McAuliffe hadn't demanded the changes.

McAuliffe called it a gimmick, but there's been no word yet that he'll take that matter to court.

Medicaid is the big fight, and may well end up being hashed out in a courtroom. The governor has promised to expand Medicaid — or do something very much like that — on his own. House Republicans have promised to fight him through the courts if needed.

As for the General Assembly Building, Watkins said it's too early to predict its future.

"I don't think it was (McAuliffe's) intent to kill it," he said. "Let's get 30 days under our belts with regard to this budget."

If the project does get going, the plan is to move General Assembly Building denizens temporarily into the Pocahontas Building, which is about a block from Capitol Square. State agencies in the Pocahontas Building were slated for relocation by December 2015, the Department of General Services said earlier this year, though exact locations weren't set at the time.

The state is also spending at least $50 million to renovate a former hotel across the street from the current General Assembly Building. It will eventually house the Office of the Attorney General, which is in the Pocahontas Building now.